Facebook says the suit is bogus, and is fighting an appeal in the case.

One key issue in the case is Facebook’s refusal to allow its clicks to be audited by a third party like the IAB, the Media Ratings Council or Ernst & Young.

Speaking privately, the company’s clients and competitors tell us they are aware that Facebook is non-transparent when it came to its advertising business.

None of them believed Facebook was acting improperly. And none sympathized with the suit. One said, “We trust Facebook and know that they are always working to refine their filters and to identify invalid clicks.”

Another added, “I don’t think they’re ripping people off.”

However, they also said that because Facebook is so big it is able to play by its own rules in a way that might not be healthy .

“They don’t let you audit,” said one client. “It’s a little bit suspect. A bit of a conflict of interest. … You have to trust Facebook’s numbers.”

Another added, “They’re not playing by the rules everyone else is playing by. It’s definitely an issue that there’s this 800 pound gorilla out there that isn’t playing by the rules.”

One major issue for advertisers is that they can only observe Facebook’s clicks independently if they send traffic off the site! to thei r own web sites. As most campaigns are designed to send traffic to the advertisers’ Facebook page, those clicks remain inside Facebook – and thus invisible to outside analytics.

“A lot of campaigns are not sending traffic off site so there’s no way to check,” one client told us.

Another said, “If we are driving users to a Facebook page — then we rely on Facebook metrics (impressions, clicks, conversions, engagement …) as the click goes directly to the Facebook page and not through a redirect AND we can’t fire pixels on Facebook pages like we can on external sites.”

Shuman Ghosemajumder, Google’s former click fraud czar who is now vp/strategy at Shape Security, told us that he knows many of the team members at Facebook who are working on click validation. “They are investing heavily in this area,” he says. A third-party audit of clicks, however is a “non-trivial” event at a company, he says. It requires time and resources, and an outside company must come in and perform experiments with the internal engineers. Nonetheless, “they need to take this very seriously,” he says.

Ars Technica reports that Pearson targeted a single page from 2007 that was using copyrighted material. Some form of miscommunication ensued, though, as EduBlogs, the host of the blog in question, found that all of its 1.45 million sites were taken down.

EduBlogs insists it was never given the chance to solve the problem itself—rather, the blogs were taken down by the overarching provider ServerBeach, to whom EduBlogs is a client. The whole problem was sorted in around 60 minutes, but that’s not really the point: rather, it highlights how dumb DMCA notices are and how badly they work. [Ars Technica]

Media rebates are one of the most controversial areas of advertising. They are, as Reed Smith defines it:

The industry practice of media companies providing rebates/incentives to agencies for referring or influencing client spending towards that media company, and then the agencies not reimbursing those funds to the client …

Rebates are a type of bribe: Media companies pay them to agencies to keep client dollars—in the form of ad buys—coming, even when those dollars may be more efficiently spent elsewhere.

Methodology of organic CTR vs paid CTR

– reviewing dozens of Google Analytics sites has shown that traffic from organic results is far greater than traffic from paid ads on search engines; roughly 75 – 85% of the traffic is from the organic side while 15 – 25% come from the paid side

Click through rate of organic results

– click through rates on the organic side were derived from analyzing dozens of client sites via webmaster tools. The click through rate of organic results is defined as number of clicks divided by number of impressions in organic search result pages.

– average click through rates from paid search are well published and well known from dozens of sources published online over the years.

While some products have been integrated into videos—like Emma Stone’s “ad” for iPhone murder apps—it wasn’t done to sell anything. So far, brands have served as excuses to make funny videos. Now they’re going to be the main event.

But everyone shouldn’t start dancing in the street just yet. While Funny or Die is good at creating funny content, it’s a whole other ball game when you have a client that’s going to have to approve content every step of the way. Who’s really going to be able to tell Will Ferrell, for example, what he can and can’t say? We’re also anticipating that agencies, who just love working/competing with new creatives on the block, will be butting heads with Gifted Youth.

The new ad shop had a soft launch during TNT’s slam dunk contest during the NBA All-Star weekend by airing a Kia commercial starring Blake Griffin and actor Jeff Goldblum. Gifted Youth also just released spots for New Era baseball caps in which comedians Nick Offerman and Craig Robinson fight over their respective love for the Chicago Cubs and Chicago White Socks. (This is a continuation of last year’s ads in which John Krasinski and Alec Baldwin feud about the Red Socks and the Yankees).

Media buying today is no easy task – it has to be simple, effective, and relevant.

Ask any buyer and they will tell you there are seemingly infinite choices available to them in selecting media for their clients.

How do they reach a final decision? Price? Relationship? Brand? Environment? Big idea?

All of these are good reasons, but I’d postulate that information or insights that can be learned from the partner are increasingly an important part of the final buying process.

Buyers want and need to learn more about what is and isn’t working for their clients across all media channels in order to best optimize existing and future campaigns.

Many vendors and start-ups are trying to apply new technology to media in an effort to make inventory more valuable and effective for publishers and advertisers alike.

And, ideally, they are trying to use technology to fuse data with inventory, not only to differentiate themselves from the crowd pre-sale but also to generate post-campaign “learnings” to share with the client.

Top media and technology companies have long been optimizing campaigns from the start (the day the campaign goes live) to ensure clients get the results they are looking for.

Additionally, they are working with an array of technologies and partners, such as Compete and Dimestore, to provide actionable “learnings” during the campaign and afterwards.

By integrating post-buy reports with most branding programs, these companies are able to give marketers a view of their audience they rarely see and, more importantly, work hand and hand with them to build repeatable programs that work for clients.

Using data and technology to improve media effectiveness can be very rewarding – often clients see a tremendous lift in key brand measures.

But the application of technology takes patience, experience and a bit of art to find the right mix of capabilities to work for each client. When media meets technology the impact can be impressive, but don’t assume just because you apply data or technology to media that you will get the desired result.

You need to work with a partner that has the people, platform and knowledge to apply technology appropriately and deliver the insights and results you expect.

What do you think?

The views expressed here reflect the views of the author alone, and do not necessarily reflect the views of 24/7 Real Media, its affiliates, subsidiaries or its parent company, WPP plc.

If you’ve ever tried to explain the concept of “make new friends but keep your old ones” to a five-year-old, you have a pretty good perspective on how many high-growth businesses approach customer acquisition and retention. Growing businesses tend to spend so much of their time and money acquiring new customers that they often overlook their best source of growth: retaining and growing their existing customer base.

One of our clients has more than 90 percent of its resources–people, marketing budget, etc.–focused on creating millions of new customers a year. Their business model is based on monthly recurring feeds, much like the cable or wireless industries. Customers come in and they stay…until they don’t. An analysis of the client’s historical data shows that the average customer stays for an average of 2.5 years. Because their customer acquisition cost is lower than their expected customer lifetime revenue, they reach a break-even point in less than two years. So it’s a great business, as long as they keep generating new customers, right?

Wrong. The problem is that as the management team’s growth expectations increase, it gets increasingly harder to acquire more customers. As a result, customer acquisition costs go up and the quality of customers, in terms of how long they stick around, goes down.

To solve this growth dilemma, the client needs to ask three key questions:

What revenue growth will we achieve if we keep our existing customers for just one additional month, on average?

What will it cost us to do this by, say, improving customer service or adding customer benefits?

How does this growth compare, both in magnitude and cost, to acquiring new customers?

The answer for our client will be the same as it is in almost all businesses. It’s cheaper, easier, and more effective to retain current customers than it is to acquire new ones. In fact, if this business can retain all of its customers by just one additional month on average, they can achieve an additional 3 percent of annual growth. If they can retain their customer base for four additional months, they can create double-digit growth–without adding a single customer.

It’s simple math–something that even a five-year-old might understand.

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Digital Consigliere

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.